Tuesday, June 15, 2010

Spain vs. Germany

Wow, Spain is calling Germany's bluff. They dare yank the curtain on unified Germany with this move, calling for Euro banks to face stress tests.

This is great for Spanish banks like Santander (STD) ... right? Or will the Euro tank if Germany's banks are found to be uneven? In that case, the Euro falls and STD, uh, gains? If the Euro falls, how can that benefit STD?

After those nice recent gains for STD, this can't be a win-win situation unless Spanish banks prove to be solid, or just as solid as German banks. But any negativity would cause financials in general to recoil, just my guess.

So really, Spain calling Germany's bluff can't be good for anyone unless you're long FAZ. Might be good to hedge with FAZ if you're long any finnie.

Ain't it true?

What I had to do was to find stocks that would be hoisted up because they stirred people's imagination for the future. ... I was not interested in the company's individual products, whether it was metals for rockets, solid fuel, or advanced electronic equipment. In fact, I did not want to know what they made—that information might only inhibit me. I did not care what the company's products were, any more than I was influenced by the fact that the board chairman had a beautiful wife. But I did want to know whether the company belonged to a new vigorous infant industry and whether it be haved in the market according to my requirements.

This, of course, was directly against the advice of many financial writers with conservative backgrounds who have been pounding into investors for generations that they must study company reports and balance sheets, find out all they can about a stock's background, in order to make a wise investment. I decided that was not for me. All a company report and balance sheet can tell you is the past and the present. They cannot tell the future. And it was for this I had to project my plans.